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A New Approach to Reintegrating Eastern Ukraine and Crimea

Russian aggression is not likely to go away soon. As a result, Ukraine needs to revise the current framework guiding its economic disengagement from the occupied regions of the Donbas and Crimea. Economic disengagement limits the risks of financing terrorism with money coming from mainland Ukraine, and makes sure that the occupied areas of Donbas don’t turn into an economic grey zone and center of smuggling. It is also important to counter the Kremlin’s policy, which seeks to preserve control over the occupied areas of the Donbas without taking any economic responsibility for the region.
Disengaging from the occupied areas of the Donbas will be complicated; prior to Russia’s aggression, the region generated 16 percent of the country’s GDP. Despite the overall ban on Ukrainian business relations with the region, there are a number of important exemptions.

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